These people will maximize your financial aid — for a fee

JillianBerman

Reporter

April can be a month of disappointment for many prospective college students. There are, of course, those thin envelopes that come in the mail signaling rejection, but there’s also another kind of letdown: finding out you got into a school and realizing the crushing debt you’ll need to take on to pay for it.

Consultants around the country are trying to help students and their families avoid the latter bummer — for a fee, of course. These professionals will fill out financial aid forms, advise families on where to apply to maximize financial aid and even help them negotiate or appeal a college’s financial aid offer.

Though there are a variety of free resources to help families with these tasks, the National Association of Student Financial Aid Administrators reported in 2014 that anecdotally they’ve seen a “significant increase” in the number of consultants offering their services recently. They cater to families who can afford to pay a hefty fee — sometimes in the thousands of dollars range — but can’t afford to pay the sticker price for many colleges for four years.

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College tuition has grown so fast over the past few decades that the price is out of reach even for families earning six figures. One prominent example is New York City Mayor Bill De Blasio, who hinted that he’ll have to resort to financial aid to pay for college for his two children in a recent interview with The New York Times. De Blasio makes $225,000 a year as the mayor and has other sources of income like rent from two properties in Brooklyn.

Kalman Chany first got into the business of financial aid consulting the 1980s when tuition prices first began to spike and a growing share of families began to wonder how they would pay for college for their kids. His New York City-based business is focused mostly on families looking to attend private colleges that can cost families about $250,000 over four years.

“It’s less expensive to hire someone than it is to do it yourself,” Chany said, acknowledging the strange logic involved in paying a consultant to help you spend less money. Still, Chany, who is trained as an accountant and worked in the Treasurer’s office of a Fortune 500 company before launching his business, said he typically saves his clients $20,000 to $40,000 over the four years. He charges $1,750 on average.

For some, like Mike, a 48-year-old Long Island dad, the peace of mind is worth the fee. “Every time I heard someone talk about college I literally would break into a sweat because I would have no clue as to how was I going to pay for college,” he said. That is, until he met Andy Lockwood, a Long Island-area college consultant, in 2009, during his daughter’s junior year of high school.

“He couldn’t fix all of my problems, but he relieved me from the terrible worry I had,” said Mike, who also used Lockwood during his son’s application process. Mike, who asked to be identified without his last name to protect his kids’ privacy, says he saved about $11,000 a year during his daughter’s first three years in school. And he saved $20,000 this year with two of his kids in college at the same time. Lockwood filled out the free federal application form for financial aid, known as the FAFSA, for Mike and coached him in the differences between various grant and loan programs.

“He basically does it all. All I do is look at the bottom line.”

Mike, acknowledges that if he had the time and the knowledge, he probably could have figured out the process himself. Still, he said Lockwood’s services were worth the price. “I know it’s not going to cost me more to use him than not use him,” noting Lockwood saved him about 10 times what he paid him. Lockwood’s fees range from $3,000 to more than $8,000 for private services. He also offers free advice on his website and in his podcast and will help families fill out the FAFSA for a smaller fee.

And for people like Mike, who is part of a two-income family and describes himself as “not broke, but not rich,” the fees may be worth it. Most parents “take a passive approach, they submit the forms and they hope for the best,” said Barry Fox, a Long Island financial aid consultant, who worked in the financial aid offices on the school side for decades. “The federal programs are designed really to help those most in need, but in reality the financial aid flows to those who understand the system.”

There are a variety of free resources for students and families who need help with financial aid paperwork. College Goal Sunday is a national program that offers assistance with the FAFSA and the Consumer Financial Protection Bureau offers a free tool for students to compare their aid packages. Many colleges will also help students and families complete the process.

“The hardest work we have to do is to make sure that students know what those resources are,” particularly for low-income or first-generation college students who may not be able to afford to pay someone to help them, said MorraLee Keller, the director of technical assistance at the National College Access Network.

“To pay an outside group to help you, I might view it as not necessary, but I’m sure there are lots of families who love to take their stuff to H&R Block,” she said, referring to the tax-preparation service.

Still, Lockwood said mounting anxiety about the economy in the wake of the recession and slow economic recovery has only upped interest in his services in recent years. “There’s more awareness that they’re not getting help from places they had hoped,” like guidance counselors’ offices, he said.

And with more attention focused on college debt, students are more likely to factor in price when choosing a college than they were years ago, Fox said. “Students who aren’t waiting to see if the economy is going to brighten; they’re assuming it may not and they’re very concerned about the tab.”

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